By Melissa J. Anderson (New York City)
Last night, the Financial Women’s Association hosted a discussion with Sallie Krawcheck, President of Global Wealth & Investment Management for Bank of America, as part of the organization’s Distinguished Speakers Series.
The candid (and often humorous) discussion touched upon career development, the state of the financial services industry, trust, and what it means to be in transition. The point Krawcheck kept returning to, though, was the importance of keeping a long term view – both in terms of the markets and in professional growth.
Regarding the state of the financial industry’s efforts to advance women in leadership positions, she said, “The industry has been working on it for a while. Progress in some years is good, and in other years it is limited.”
Many companies in the financial services industry operate in a state of crisis, she explained, working to beat quarterly results, rather than looking out for the long term good of the firm. And this behavior transfers to the firms’ hiring processes as well. Because these banks are constantly in crisis mode, managers choose to promote the so-called safe choices – people who look and behave similarly to the ones already in charge. “This goes against giving people who not just look different, but think differently” opportunities for promotion, Krawcheck said.
How to address the lack of women in senior positions in the financial services industry? First, a change in the “short term-ism” of management in the financial industry is needed.
Krawcheck also mentioned that studies showing firms with more senior women perform better than their less gender-balanced counterparts (like Catalyst’s 2004 report The Bottom Line: Connecting Corporate Performance and Gender Diversity) are helping to change assumptions and put more women in leadership positions. Women also need to take the responsibility to help each other over time. She also stressed the importance of hard work. “Guys who work hard, women who work hard, good things tend to happen to them.”
Dealing with Transition
In the financial services industry, “it feels like we’re always in transition,” Krawcheck said. She continued, “Careers need to be thought through with an understanding that the environment changes very quickly.”
When asked why she returned to the industry when after leaving her position as CEO of Citi’s wealth management service in 2008, she said returning “was never an issue. I love what I do.” She continued, “When done correctly, financial services and wealth management can really make a difference in peoples’ lives.”
Her advice to women in career transition was to stick to it. Regarding the period between her departure from Citi and her return to work at Bank of America, she said, “I networked like a fiend.” She wrote articles, had meetings and phone conversations, and “gave the illusion of control when [she] wasn’t really in control.”
“In hindsight,” she explained, “I could have traveled the world and waited for the phone call, but that’s not my personality.”
Future of the Financial Services Industry
“This is my new beef” Krawcheck exclaimed. “The way we talk about risk” in the industry. She explained that those working in wealth management need to work harder to recognize their clients’ concerns as well – like their health, retirement, or sending their kids to college. “Underperforming by 100 basis points may not be the worst outcome,” she said. “We need to behave in a way that engenders trust in them.”
The current downturn is the result of many complicated issues, Krawcheck explained. “There’s a lot of blame to go around… But there are some good people in the industry that have learned some honest lessons.” Firms need to begin “incentivizing the appropriate kind of behavior,” which means “managing through years, not through quarters,” she said. She also stressed the importance of continuity in management, building strategy with more legs, and incentivizing investments with “one, two, five, or even a ten year payoff.”
She also mentioned the importance of a global outlook when planning for the industry’s recovery. “It is important to take the US blinders off.” Emerging markets have performed better before, during, and coming out of the downturn, she said.
Finally, she discussed indicators the economy is getting back on the right track. One key metric she mentioned was the unemployment rate. “Folks are looking over their shoulders – are other people beginning to hire?” Once hiring begins again, “things are going to feel a lot better across the board,” she said. Additionally, she described small business lending as a “chicken or egg” situation: the industry’s willingness to lend to people, as well as their willingness to take the risk. “Which is the driver and which is the outcome?”
Final Krawcheck Advice
“I have certainly learned a lesson and it was a hard lesson – feedback is a gift.” Krawcheck explained. You have to ask for it though. “Ask for it and accept it graciously and appreciate it.” On mentors: “I never saw a reason that your mentor couldn’t also be your boss,” she explained. “Why not kill two birds with one stone?” Additionally, “It’s amazing what you can do for effort.” You may not be the smartest person in the room, but you can be the hardest worker – and that means a lot.
Regarding family life, “I don’t have great work/life balance,” she admitted. “I do have a great husband, great babysitter, great kids, and a great mother.” Women should realize that if they choose to have a family, “don’t let it rest all on your shoulders. It takes a village,” she said.
And finally, “let the little stuff go. Pick the important stuff.”